As a shareholder of Reliance Industries, I received an email invitation to attend the Virtual AGM and be the part of the extravaganza. The event was hosted on JioMeet and it showed tremendous confidence of company on its own product when JioMeet has been panned for its design and tech. This shows that Jio’s competitors and rest of the world are in for more surprises !
Over last six weeks of online classes for both Business Marketing (B2B) as well as Managing Platform Businesses(MaP) Course, I have had multiple discussions about Jio and its ecosystem approach to business. I have talked about it in parts elsewhere but would like to put some of that into a more coherent picture. Here is an attempt to understand JBU- Jio Business Universe ! (Idea courtesy - Aru’s Blog )
DTW
During the Week, even Google fell for the Jio’s Charm ! This adds up to one and half lakh crores INR of foreign investments from companies including Facebook , Qualcomm etc in Jio Platforms amounting to an approximate 33% dilution of equity and perhaps few board seats. I am reminded of Sachin’s statement on Viru’s retirement when he spoke about having the best seat (Non-striker end) while Virendra Sehwag took on bowlers !
The BigTech is going to have an exciting ring side view of the Indian Consumer Transformation over next few years. I see this playing out in three different relationships in Consumer Journey. First, between between Retailers and Consumers ; Second, Brands and Retailers ; and Third, between Brands and Consumers.
First , Jio has started to transform the relationship between Retailers mostly Kirana Stores through JioMart. With the integration of WhatsApp into e-commerce, we might be looking at a super-app on lines of Chinese WeChat. The backbone of this relationship is of course Jio Phone. Through its dirt cheap data plans and the forthcoming integration with the Google platform including the Android OS for the next generation 4G/5G devices, Jio would be in position to completely own the retailer-consumer relationship. Their various investments including in NowFloats Technologies Pvt. Ltd and Fynd helps them to get closer to the retailers by solving their pain points of discovery, inventory management and offline to Online transformations.
Second, Jio is going to transform the retailers’ relationship with the brands/manufacturers. As India’s largest retail chain, Reliance Retail would be helpful in getting the manufacturers fall in line with Jio Platform’s strategy to mediate the relationship between Brands and Kirana stores. With almost 11,800 stores and impending acquisition of Future Group, Reliance Retail would be in an enviable position to serve small Kirana stores directly. With stores in almost all urban and peri-urban areas, both brands and Kirana store owners would find it valuable to partner with Jio.
With its PoS machine installed in Kirana stores, Jio has a better visibility at stock and flow in the stores and thus would be in better position to provide credit facilities as well. Their acquisition like Grab can help to serve the B2B and B2C customers with services ranging from on-demand, reverse logistics and last mile connectivity. Reliance Retail has also created multiple store brands over last decade to get higher margins and thus fuelling tremendous valuation gains.
Third, the most important play is transforming the Brand-Consumer Relationship. Jio has made multiple investments including in AR/VR, Artificial Intelligence and other ConsumerTech companies. They might mediate this relationship primarily in two ways- First, promotional sales campaigns on Jio Platforms; and Two, using the consumer data for brand building. With Kirana stores and Modern Format Retail data flowing through the Jio Platform, Brands would be compelled to use the Jio Platform to run their sales promotion campaigns. Jio Platform via JioMart/ JioPhone would have better visibility at both ends of sales promotions - Stores & Consumers- and they would use this to offer tremendous value to brands willing to use their platform. Their collaboration with Facebook and other acquired assets including media properties like Saavn would help in developing a detailed profile of the Indian Consumers which the brands would not be able to ignore.
With the major Tech Platforms collaborating with Jio, the Avengers Team has been assembled. This team led by Retail/Mobile Sevice/Government relations by Reliance Industries , Social Networking/ Instant Messaging by Facebook/WhatsApp, Cloud Computing by Microsoft, Hardware by Intel/Qualcomm and Handsets/Operating system by Google has all the key capabilities to provide tremendous value.
In short, the new landscape would include the humble Kirana Store as the centre of Universe and this TEAM which may provide most value to customer via them might turn out to be the new Master of this Universe !
OTW
Over the Weekend, I rearranged my library especially books about Platform Businesses and realised that most of these businesses looked audacious in the beginning and thus founders must have faced “It would Not Work” response from most of the stakeholders.
But then each one of them went on to create colossal enterprises that humans have seen so far. In my opinion, the key has been momentum and tenacity to keep going even the majority opinion seems to be averse to the idea. Covid 19 and its resultant socio-economic-health crisis has provided an unprecedented opportunity to these firms to amass even more power and wealth as they continue to provide value to their customers and partners.
Keep Moving !
I Love You
Shailendra
PS-I had the pleasure of hosting Lt Gen Anil Kumar Bhatt for Season 3 Episode 2 of MountainSpeak on 12th July 2020. Among the many insights, one about “Your Team is Your Family “ stood out for its simplicity and usefulness in finding purpose in our life. You could catch up with the episode and sign up for the next episode by clicking on respective links.
One of assumption is that Jio will follow the usual route of data mining and analytics. But with rising concerns of privacy, keeping so much information about consumer, producers and distribution will become a challenge.
Another offshoot of this data can be Reliance venturing into more private labels across the board and going head-on with market leaders
Sir I remember we had a discussion on the concept of Super App and now I can clearly see where Jio is heading .Sir I feel the rate at which Jio is entering into various markets very soon we might hear Mukesh ambani giving tough competition to Jeff Bezos in terms of being the world richest man.Jio has in it all to become the one stop solution for all the requirements of the consumer ,manufacturer and the distributors